(Answered) Question - the account balances for terrys auto shop as of

Accounting

Question - The account balances for Terry's Auto Shop as of January 1, 2016, are as follows:

Account Titles
Cash	$6,150
Inventory	3,040
Common Stock		$7,380
Retained Earnings		1,810
Total	$9,190	$9,190

The following events affected the company during the 2016 accounting period:

1. Purchased merchandise on account that cost $4,110.

2. The goods In Event 1 were purchased FOB shipping point with freight cost of $295 cash.

3. Returned $410 of damaged merchandise for credit on account

4. Agreed to keep other damaged merchandise for which the company received an $265 allowance.

5. Sold merchandise for $4,940 cash that cost $2,580.

6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $120 cash.

7. Paid $2,890 on the merchandise purchased in Event 1.

Required - Prepare an income statement and balance sheet.

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